To cool the economy and bring inflation under control, the Fed embarked on an aggressive campaign to raise the federal funds rate during 2022 and 2023. The final hike was in August 2023, with the rate settling at a two-decade high of 5.33% -- far above its pandemic-era low point of 0.13%.

U.S. government debt rallied on Wednesday, sending the policy-sensitive 2-year yield down by the most in more than a week, after Federal Reserve officials stuck with their expectations for interest-rate cuts through 2027.